USDOL proposes restoring OT for many salaried employees

Pago Pago, AMERICAN SAMOA — The US Labor Department (USDOL) is proposing to increase the “special salary level” to $890 per week for salaried workers—who are considered exempt ‘white collar’ employees — in American Samoa and the salary level is to increase after the highest industry minimum wage for American Samoa equals the federal minimum wage.

This is according to USDOL data and information made public Wednesday, as part of a national announcement by the federal agency regarding a notice of proposed rule-making that would restore and extend overtime protection to 3.6 million salaried workers in the U.S including the territories.

The proposed rule would guarantee overtime pay for most salaried workers earning less than $1,059 per week, about $55,000 per year, said USDOL, which noted that the proposal will also restore overtime protections for U.S territories.

According to USDOL, from 2004 until 2019, the department’s regulations ensured that for U.S. territories where the federal minimum wage was applicable, so too was the overtime salary threshold.

And the proposed rule would return to that practice and ensure that workers in the U.S. territories subject to the federal minimum wage have the same overtime protections as other U.S. workers, it says.

USDOL data and public information shows that the special salary level for employees in American Samoa is currently $380 per week — and has been since 2004. The Department determined that a special salary level lower than the other four territories was warranted for American Samoa because, the territory was subject to special minimum wage rates below the federal minimum wage.

For the new proposal, USDOL explained that this rule-making proposes to update and revise the regulations for determining whether certain white-collar salaried employees, in the US and its territories — are exempt from minimum wage and overtime requirements provisions of the Fair Labor Standards Act (FLSA).

Employees are exempt if they are employed in a bona fide executive, administrative, or professional (EAP) capacity as those terms are defined in the Department of Labor’s regulations. This exemption from the FLSA is sometimes referred to as the “white-collar” or “EAP” exemption.

Provisions of the 267-page federal notice states that the USDOL proposes to apply the standard salary level ($1,059 per week for all US states) to employees in Puerto Rico, where the federal minimum wage has applied since 1996; Guam, where the federal minimum wage has applied since at least 1957; the U.S. Virgin Islands, where the federal minimum wage has applied since 1989; and the CNMI, where the federal minimum wage has applied since 2018.

USDOL also “proposes to set a special salary level for employees in American Samoa equal to 84 percent of the standard salary level — $890 per week, based on a proposed standard salary level of $1,059 per month - since American Samoa remains subject to special minimum wage rates below the federal minimum wage).

(USDOL noted that the federal special wage rates by industry in American Samoa currently range from $5.38 per hour to $6.79 per hour.)

The federal agency points out that this is the same ratio to the standard salary level that USDOL used in the 2004 and 2016 rules, as well as the same ratio to the salary level in the other four U.S. territories that the Department used in the 2019 rule.

According to the federal Fair Minimum Wage Act of 2007, as amended, industry-specific special minimum wage rates in American Samoa are scheduled to be gradually eliminated.

Under this legislation, barring further Congressional action, special wage rates in American Samoa will increase by $0.40 on September 30, 2024 and every 3 years thereafter until they equal the federal minimum wage.

“As such the Department also proposes that 90 days after the highest industry minimum wage for American Samoa equals the federal minimum wage, the full standard salary level will apply for all EAP employees in all industries in American Samoa,” said USDOL proposal.

USDOL said it recognizes that the salary levels for the U.S. territories have not changed since 2004, and it understands that U.S. territories face their own economic challenges.

USDOL is seeking public comments on the overall proposed rule, with details and summary online (https://www.dol.gov/agencies/whd/overtime/rulemaking/faqs).

The federal department will issue an updated notice when the proposed rule is to be made final.